Chase Shows How Not to Manage an Online Charity Campaign

Lofty Goals Get Entangled With Charges of Voter Fraud and Bungled Bookkeeping

JP Morgan Chase & Co.'s 2012 Facebook-based Chase Community Giving Program began in 2009 as one of the first corporate philanthropy efforts to try engaging with online audiences in social media. More than 1.5 million online votes helped 196 charities win a share of $5 million in prizes awarded in the 2012 contest.

Unfortunately, Chase's contest has become a model of what -- and what not -- to do in a corporate philanthropy campaign.

The goals are lofty, but the 2012 contest descended into chaos, capped by Chase's bone-headed announcement of $10,000 prizes to 15 charities that didn't get enough votes to win -- apparently the result of a clerical mistake. The same charges of voting fraud that have plagued the contest since it started also resurfaced this year, and Chase has been accused of conducting a secret vote count that allows it to block winners whose mission is not consistent with the bank's public image.
Even some of the winners were disgruntled, wondering whether the effort they had to make with their limited resources had actually left them worse off in the end.

Chase spokesperson Erich Timmerman said the bank "actively monitors voting for improprieties with technology and a third-party organization," but several of the charities involved in the contest disagree.

"What a disaster this contest was for everyone," said Alex Aliksanyan, founder and president of DogsInDanger.com, a national charity that helps save dogs scheduled to die in shelters, and which won $10,000.

To make matters worse, following the botched awards announcement, Chase made another controversial decision, telling its 3.8 million Facebook fans: "To make this right we will be donating $10,000 to each of the eligible charities affected." The 644 comments on that post were a mixed bag of congratulations for doing the right thing and cries of ineptness.

The 15 groups were still upset. Said a representative of Critter Camp, "This mistake of theirs caused damage to each organization's ability to raise funds, since our supporters think we won 10K, and it damages the integrity of the organizations as well; people will think we did something wrong to cause us to lose the $10K."

Some truths that the sponsor of any such charity campaign needs to keep in mind:

Somebody will always try to scam every contest. There is even an online community for cheaters.

It gets pretty dirty. One charity has been known to hire scammers to vote up the tally on another, hoping that one would be disqualified!

It's true that you can buy fake profiles and votes for very little money, and it's not 100% clear that you won't benefit if you do.

There are many lessons to be learned from Chase's experiences. Among them:

Facebook is not a secure site for nominations or voting. Assuming that Chase knows how to keep its online banking site safe from fraud, they should consider running their next contest on a site they control. To take advantage of Facebook's billion members, Chase could have run a contest teaser on Facebook and driven entries and voting to a more secure site.

Acknowledge screw-ups openly. Chase should have said clearly, and early -- on its Facebook page and all the social networks where the contest was promoted -- that it knew cheating was happening and explained the controls it had in place. Organizations stand to gain from engaging in productive conversations with both positive and negative responders.

Don't be in such a hurry to announce winners. "Every system has its cheats. It's impossible to prevent fraud unless someone manually checks every single vote that 's cast," says Caimin Jones, founder of Genius StartUp. Chase supposedly scrubbed the 1.5 million votes of cheaters and then issued a press release and site updates announcing the winners in less than 12 hours from the contest end. What's the rush? If they'd taken a few days and done it right -- IT professionals I asked said the process is difficult and time-consuming -- more people might have ended up singing Chase's praises.

Show us where the money goes. Chase has a bunch of wonderful videos that show what charities have done with the money won in earlier years, but those are quite hidden.

Take viable steps to prevent cheating next year. Online contests are difficult to do well. Chase really needs to re-think the approach and come back more organized next year. At the very least, email confirmation should be required to confirm the address of each voter. While it's still possible to cheat, requiring a live response makes it a whole lot less likely.

The bottom line: Chase appears to repeat the same mistakes year after year. Seems like time for some reform by the bank.